+0.27(+0.44%)

-5.90(-0.44%)

-0.20(-1.17%)

-0.01(-0.71%)

Big put trade targets emerging markets

The iShares Emerging Markets Fund is on pace for its highest close since May 1, but a large bearish position tops its option activity today.

The EEM is up 1.53 percent to $42.53 in afternoon trading, just off its session high. The exchange-traded fund bounced off support at $40 three weeks ago and is now up against resistance.

A trader bought 16,709 February 40 puts for $0.78 and sold the same number of February 36 puts for the bid price of $0.23, according to optionMONSTER's tracking systems. The volume was well above the open interest at each strike, so this is a new position.

This put spread cost the trader $0.55, which will be lost if the EEM remains above $40 through expiration in mid-February. The maximum profit of $3.45 would be realized if shares are below $36 at that time. Shares haven't been below that price since the October 2011 lows. (See our Education section)